Fibank’s Q1’18 NII adds 2.1% YoY; Consumer lending up 23.1% YoY

Q1’18 interest income of FIB declined 10.8% YoY to BGN 82.2m while the continuing effect from deposit repricing brought interest expenditure down 40.4% YoY. Consequently, net interest income added 2.1% to BGN 65.5m. The increase was despite the low interest environment while gross loan book registered 0.6% YoY decline (+1.3% YTD) to BGN 5.8bn. Consumer lending (gross) grew by the impressive +23.1% YoY, mortgages increased by 12.5% YoY while credit cards added 2.6% in line with the retail-focused strategy of the bank. Core retail portfolio (net, excl. other retail loans*) increased to BGN 1 405m, +11.4% YoY, while net corporate loans grew by 2.1% to BGN 3 754m. Deposits from customers declined by BGN 330.1m YoY to BGN 7.5bn with the management of excess liquidity. The non-interest income was down 3% YoY as declines were registered in FX gains as well as other income. TOI stood at BGN 94.4m, +0.4% YoY. The administrative expenses of the bank added 2.8% YoY to BGN 49.7m mainly as a result of the 8.9% growth of compensation cost. Other operating expenses also increased to BGN 7.9m, +30.3% YoY on lower income from sales of assets. As a result, pre-provisioning profit declined 7% YoY to BGN 36.6m. The credit provisions line also grew 37% YoY to BGN 22.7m while tax line came to positive BGN 8.9m, most likely as a result of the additional provisioning under IFRS 9. Consequenlty, the bank reported BGN 22.9m net profit in Q1’18 (EPS of BGN 0.21), up by 12% YoY. The total NPL ratio declined to 20.6% compared to 21.7% at end-2017, while coverage increased to 56.3% from 48.1% in Dec-2017. Note that IFRS 9 came into effect this year which resulted in additional provisioning of BGN 105.4m reflected directly in the bank’s equity. CAR decreased by 0.19 p.p. YtD to 15.7% while CET I ratio decreased to 12.69% from 12.87%. *Other retail loans include REPO transactions